CEO of charity for veterans charged with federal fraud crimes including money laundering

A federal grand jury returned an indictment charging a former Virginia resident with devising and executing a scheme to defraud the public through his registration and operation of a charity that purported to provide services and support to homeless and destitute veterans.

James W. Arehart, 45, now a Myrtle Beach, S.C. resident, was employed full-time as a government contractor when he registered a 501(c)(3) organization in April 2018 with the Internal Revenue Service under the name Providing Hope VA.

According to the indictment, Arehart also registered this entity in South Carolina as a charitable organization, and thereafter established a social media and online presence for the charity including a Facebook page and website.

Arehart allegedly described Providing Hope to the public as a charity whose “direct mission” was to help homeless and destitute veterans by establishing the Providing Hope Center, which was to be a freestanding facility that offered housing, job training and other support to veterans.

Providing Hope’s fundraising method is alleged to have involved the advertisement and sale of raffle tickets for high-end vehicles. Arehart allegedly purchased these vehicles, then raffled them off in livestreamed videos on Facebook.

Between 2018 and August of 2021, it is alleged that Arehart’s raffle sales generated more than $9 million in proceeds all of which flowed into and through Providing Hope’s bank account. Arehart had complete and sole control over the bank account. Arehart was Providing Hope’s president and sole board member during this time period.

In seeking to induce the public to financially support Providing Hope, Arehart allegedly made numerous and repeated false statements to the public promoting his charity. These included alleged misrepresentations regarding Arehart’s compensation and salary from Providing Hope, misrepresentations about Providing Hope’s purportedly segregated and steadily growing building fund and alleged misrepresentations about the purportedly tax-deductible nature of Providing Hope’s raffle ticket purchases.

Arehart also allegedly used the charity’s funds for his own benefit on numerous occasions, including paying for his pet’s veterinary bills, and miscategorized those and other expenditures in Providing Hope’s tax filing in 2019 with the IRS.

When confronted by federal agents investigating his activities, Arehart is alleged to have made false statements consistent with the false claims he had advanced to the public in the months and years prior.

Arehart made his initial appearance in court on Wednesday.

Arehart is charged with mail fraud, wire fraud, money laundering and making false statements to federal agents investigating his conduct.

If convicted, Arehart faces a maximum penalty of 20 years in prison.